S&P rates Level 3 convertibles CC

Standard & Poor's said it assigned its CC rating to Level 3 Communications Inc.'s shelf drawdown of $880 million 10% convertible senior notes due 2011. All other ratings on the company, including the CCC corporate credit rating, were affirmed.

The outlook is developing.

Issue proceeds will be used for general corporate purposes, including possible acquisitions, working capital, capital expenditures, debt refinancing, and debt repurchases.

S&P said the ratings on Level 3 continue to reflect very high credit risk from elevated debt leverage, exacerbated by soft long-distance telecommunications industry conditions. Tempering factors include a sizable cash balance and an absence of meaningful debt maturities until 2008, the agency said.

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